On March 9th, in response to various public concerns following the implementation of the "Labor Contract Law," Sun Baoshu, Deputy Director of the Ministry of Human Resources and Social Security, addressed the issue during a press conference at the 11th National People's Congress. He emphasized that the current challenge is not about revising the law, but about ensuring its effective and sincere implementation.
Sun Baoshu noted that the majority of workers and employees have shown strong support for the law since its introduction, and most companies have been actively complying with it. However, there are still three main criticisms emerging from some sectors. First, some believe that signing open-ended labor contracts will create a rigid employment system. Second, others argue that the law significantly increases the cost of hiring, making it difficult for businesses to sustain operations. Third, there is concern that the law might negatively impact the investment environment and job creation.
According to Sun Baoshu, these misunderstandings stem from an incomplete understanding of the law. He clarified that open-ended labor contracts are not equivalent to "iron rice bowls" or guaranteed lifetime employment. In fact, the law provides specific conditions under which labor contracts can be terminated, and compared to the previous "Labor Law," the criteria for contract termination have actually been made more flexible.
Regarding the second point, he explained that the increase in labor costs due to the new law is minimal from a systemic perspective. The perception of higher costs often comes from companies failing to meet their legal obligations to pay social insurance premiums. The new law now clearly defines these requirements, ensuring fair treatment for all employers. It is neither ethical nor fair to pursue high profits by exploiting employees' rights, especially when law-abiding companies are already following the rules.
Finally, Sun Baoshu stressed that implementing the Labor Contract Law does not conflict with improving the investment environment or expanding employment. On the contrary, a sound legal framework and harmonious labor relations will help strengthen the investment climate and create more job opportunities. He encouraged all stakeholders to work together to ensure the law is properly implemented, benefiting both workers and enterprises in the long run.
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